Millennials Still Spend Majority of Their Dollars in Brick-and-Mortar

Posted: August 27, 2013

The NPD Group finds that the majority of millennials’ retail dollars are being spent in brick-and-mortar stores. According to a new report, "Winning the Fight For Millennial Shoppers," 81% of Millennials’ retail spending occurred in brick-and-mortar stores, compared to only 19% online.

Over half of millennials (53%) shop in-store during a typical week. Even though this group of consumers shops in-store often, they don’t always buy. In fact, millennials have the lowest shopping conversion rate of all generations at only 57%. A bar graph titled "Shopping Conversion Rate by Generation," compiled by The NPD Group with data from its Shopping Activity Services taken May 2012–April 2013, shows a conversion rate of 66% for Gen Xers, 69% for boomers and 72% for seniors.

“Millennial shoppers have the lowest shopping conversion rate because they are the most selective, as well as the most economically challenged,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc.

Value-oriented retailers within the dollar store, secondhand, drugstore and off-price channels, who appeal to millennials on tight budgets, are getting more millennials into their stores. But dollar stores and second hand stores have also been more successful than other channels at converting millennials to purchase this year.

“Millennial shoppers are the most elusive generation and the most challenging to keep engaged. In order to get more millennial consumers in store, retailers need to understand how millennials’ shopping habits differ from other generations. Previous generations were more easily impressed by marketing and advertising strategies. With this group you must have a strategy to grab their attention in and out of [the] store,” concluded Cohen.